Yesterdays drop failed to reach the downside targets I was looking for but could still have been enough to complete the sell off from the October 3rd high (and September 21st ATH). Call it a shallow C wave down I guess as clearly it did not match the length of the A wave or even some common Fibonacci Level of it.
Then after the close there was a "possible" FP on the SPY of 271.74, but this morning around 4:45 am EST it was hit and we've rallied back up in the premarket session right not to about flat. I'm not sure if we'll drop again but if so that FP area is likely the bottom. It will make a "higher low" from the move down yesterday and could be the last low before the expected rally up into the midterm elections.
If the ABC down move ended yesterday from the all time high (ATH) then we should have completed the first wave 1 up into the close yesterday and "if" we drop again into that premarket low area then I'd say that's the wave 2 down. That sets up the wave 3 up next, which should continue into the end of this month with an upside target range of 2800-2850 SPX. The bulls were very tricky yesterday on the down move as they kept it from hitting the lower targets that the bears where looking for and instead rammed it back up all day long trapping the bears.
It wasn't a super high volume day like the 10th and 11th was of this month. It tells me there were some bears that did not bail out, but when this wave 3 up gets going I'm sure they will. But for today I'd lean toward a move down to that early morning low (and "possible" FP afterhours) early in the day and then up into the close. Odds favor today closing green as well, so if you are a bear I wouldn't get too cute and "if" we drop in the morning I'd used it to get out as it's the bulls time to take the reins for awhile. Also, I made a mistake yesterday... there's NO FOMC today. Sorry. Next one is the week of the elections... LOL. One last thing... Full Moon today around 12:45 pm EST. BO! Are you scared?
